US wheat futures surged to their highest levels in more than 29 months on Wednesday on strong export sales to countries in North Africa and the Middle East. Concerns about dwindling global supplies continuing to fuel demand for US supplies in the coming months also were supportive and wheat prices notched the biggest daily gains in percentage terms in two months.
The benchmark Chicago Board of Trade March soft red winter wheat contract settled 27-1/4 cents higher, a 3.3 percent gain, at $8.63 a bushel. Funds bought an estimated net 4,000 to 5,000 CBOT wheat contracts. At the Kansas City Board of Trade, March hard red winter wheat futures rose 28-3/4 cents, or 3.1 percent, to $9.52-3/4 a bushel.
MGEX spring wheat futures for March delivery rose 29-1/4 cents to $10.10-1/4 a bushel. MGEX's 3 percent gain was its biggest increase in percentage terms since December 2. Ideal crop conditions in Russia's Black Earth region raise hopes of large winter wheat harvest.
Saudi Arabia plans to import 2 million tonnes of wheat in 2011, like last year, and will boost imports to 3 million tonnes after 2016 as it ends local production - Jeddah grains source. Very cold weather over the next several days in the US Plains is putting unprotected hard red winter wheat at risk of winterkill. Feedlot cattle also will be put under stress from the bitter cold temperatures reaching subzero Fahrenheit levels.
Blizzard conditions continue in the US Midwest, leaving an insulating blanket of snow for the dormant soft red winter wheat crop. The heavy snow has nearly halted transportation of grain and livestock. Traders said there now was some concern about possible weather damage to the Russian and German wheat crops.
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